Clearwire 2007 Annual Report Download - page 33

Download and view the complete annual report

Please find page 33 of the 2007 Clearwire annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 128

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128

If we do not obtain and maintain rights to use licensed spectrum in one or more markets, we may be
unable to operate in these markets, which could adversely affect our ability to execute our business
strategy.
To offer our services using licensed spectrum both in the United States and internationally, we depend on our
ability to acquire and maintain sufficient rights to use spectrum through ownership or long-term leases in each of the
markets in which we operate or intend to operate. Obtaining the necessary amount of licensed spectrum in these
markets can be a long and difficult process that can be costly and require a disproportionate amount of our
resources. We may not be able to acquire, lease or maintain the spectrum necessary to execute our business strategy.
In addition, we have in the past and may continue to spend significant resources to acquire spectrum in additional or
existing markets, even if the amount of spectrum actually acquired in certain markets is not adequate to deploy our
network on a commercial basis in all such markets.
Using licensed spectrum, whether owned or leased, poses additional risks to us, including:
• inability to satisfy build-out or service deployment requirements upon which some of our spectrum licenses
or leases are, or may be, conditioned;
• adverse changes to regulations governing our spectrum rights;
• inability to use a portion of the spectrum we have acquired or leased due to interference from licensed or
unlicensed operators in our band or in adjacent bands;
• refusal by the FCC or one or more foreign licensing authorities to recognize our acquisition or lease of
spectrum licenses from others or our investments in other license holders;
• inability to offer new services or to expand existing services to take advantage of new capabilities of our
network resulting from advancements in technology due to regulations governing our spectrum rights;
• inability to control leased spectrum due to contractual disputes with, or the bankruptcy or other reorga-
nization of, the license holders, or third parties;
• failure of the FCC or other regulators to renew our spectrum licenses as they expire and our failure to obtain
extensions or renewals of spectrum leases on acceptable terms before they expire;
• failure to obtain extensions or renewals of spectrum leases, or an inability to renegotiate such leases, on
terms acceptable to us before they expire;
• potentially significant increases in spectrum prices, because of increased competition for the limited supply
of licensed spectrum both in the United States and internationally; and
• invalidation of our authorization to use all or a significant portion of our spectrum, resulting in, among other
things, impairment charges related to assets recorded for such spectrum.
We expect the FCC to make additional spectrum available from time to time, including 60 MHz of spectrum in
the 700 MHz band. The FCC is currently conducting an auction for the 700 MHz band spectrum. Additionally, other
companies hold spectrum rights that could be made available for lease or sale. The availability of additional
spectrum in the marketplace could change the market value of spectrum rights generally and, as a result, may
adversely affect the value of our spectrum assets.
Interruption or failure of our information technology and communications systems could impair our
ability to provide our services, which could damage our reputation and harm our operating results.
We have experienced service interruptions in some markets in the past and may experience service inter-
ruptions or system failures in the future. Any service interruption adversely affects our ability to operate our
business and could result in an immediate loss of revenues. If we experience frequent or persistent system or
network failures, our reputation and brand could be permanently harmed. We may make significant capital
expenditures in an effort to increase the reliability of our systems, but these capital expenditures may not achieve the
results we expect.
25